The “Legacy Formula” for a Compelling Legacy

by | Apr 24, 2023 | Estate & Legacy Planning, Insights

Imagine you’re on a walk with wealthy friends and they talk about the struggle they’re having in deciding what to do with their wealth when they’re gone. They want to leave a compelling legacy, both financially and personally, but they aren’t sure how to go about it.

To quote Spiderman (well, his uncle Ben, if we want to get picky), “With great power comes great responsibility.” It’s a privilege, and a great responsibility, to leave significant wealth to the next generation. So, what would you say to your friend?

I recommend starting with a good definition of legacy, then thinking about how to craft the impact they want to make.


What is the “Legacy Formula”?

Everyone leaves something behind, but some are more intentional than others. Like tossing a pebble into a pond, the ripples will impact those you love long after you’re gone.

Your estate may involve passing along an inheritance, trust, or other assets to your heirs. But your legacy is much more than just money or possessions. It also involves conveying your values. Consider this legacy equation:

Value + Values = Legacy

Value is the wealth you will leave to the people and causes you care about.

Values are what you consider most important in life.

Legacy, as a result, is the total impact you make both with your money and your character. Let’s look at each part individually.


Passing Your Value

Passing financial wealth to those you love can be a great achievement. But, if it isn’t done correctly, your legacy can do more harm than good. Fortunately, you can craft a plan that transitions your wealth and protects your loved ones at the same time.

We think about this as “preparing your wealth for your family”, or estate planning.

Estate planning is the process of developing a legal plan for transitioning your wealth after you are gone. It requires time, effort, and a qualified team to get it right. But the results will make the process worth it, as we discuss in Is Your Estate Plan by Default or Design?

The end result should be a clear path to pass your wealth to those you care about – a path based on your values. I can’t overemphasize the importance of starting with the impacts you want to make, then shaping your estate plan around those values. Many end up with a complex web of trusts and tax strategies (which can be very effective!) before considering the real impact they want to make.

This leads us to the importance of your values.


Passing Your Values

Your legacy is much more than how much wealth you pass on. It also represents the impact you’ve had on those around you and how you wish to convey what’s most important to you. Passing these values to future generations is part of your compelling legacy.

We think of this as “preparing your family for your wealth”.

To get started, ask yourself these questions:

  • What is the role of wealth in our lives?
  • What do we hope our wealth will do in our family’s lives?
  • How do we create inheritances that will further our family values?

This requires soul-searching and modeling. Living out your values now is the best way for your heirs to follow your example when you are gone. Spend the quality time now investing in your family, building purposeful memories, and instilling the “why” behind the impact you hope they make with your wealth.

As you move through this process, here are four ways to convey your values as part of your legacy:

1. Invest Time in Your Loved Ones

When it comes to leaving wealth to family, the best people to leave money and resources to are already content and productive. Your wealth will not make unhappy people happy. I’ve seen examples in my own life of families divided and bitter because wealth was distributed “unfairly.” If money will enable someone to continue down an unhealthy path, it could cause more hurt than help.

Invest time and energy now to help them learn how to become content and productive by learning to invest and give. This helps them view wealth as a tool to make a difference in their lives and the lives of others.

2. Pass Along Your Skills

You’ve undoubtedly amassed significant knowledge and skills over your lifetime. When you think back, your legacy isn’t merely about passing along the fruits of your labor but also about how to convey your knowledge and skills to those you care about.

It can be easy to overthink this task. Maybe one of the skills you’re most proud of is cooking authentic Cajun gumbo, quilting, or working on classic cars. But it could also be your love of pre-marriage counseling (coaching) couples, to prepare them for a healthy marriage, as my wife and I have done for years.

You’ll be surprised much your loved ones will appreciate the gesture and opportunity to soak up some of this knowledge.

3. Get Involved in the Causes You Care About

If serving causes you care about is important to your legacy, try to get involved today! Your impact is more than the money you contribute. Giving of your time and talent goes a long way in passing on the value of serving your community and those in need. If your children see you tirelessly supporting a cause you deeply care about, they’ll be more inclined to be just as dedicated to the causes that mean something to them.

In addition to making a difference in the world, charitable giving can provide some significant tax advantages to your estate. If you’d like to dive deeper into this topic, see our Charitable Planning library!

4. Create an Ethical Will

Your estate plan, wills, and trusts are necessary estate planning tool that represents the “how” of leaving your legacy. But an ethical will is something much different. It explains the “why” behind all this planning, the values behind your estate plan. Think of it as a love letter to those you care about. We go into more of the details of How to Write an Ethical Will in another post.

Leaving a compelling legacy isn’t a simple process, but it is surely one of the most important efforts you can make. Look for others who have done it well and ask for their guidance. Reach out to us for help, too!

Alterra Advisors - Josh Whelan

Craig Hamilton

Strategic Advisor

About the Author

With over 30 years of experience as a Certified Financial Planner, Craig Hamilton joins Alterra as a sort of paternal figure and has a position of respected “special counsel” to the firm. This role is likely familiar to Craig as one of his four children is also a financial advisor. Mr. Hamilton is also a Certified Public Accountant with a degree in Business from Pacific Lutheran University in Tacoma, where he graduated magna cum laude.

Craig was born and raised in the Pacific NW and built a family here that now includes seven grandchildren. In Craig’s words, “coaching, counseling, and mentoring are in my DNA.” This approach also characterized Craig’s financial career for 20-plus years as an Investment Officer for Russell Investment Services and their later incarnation as The Threshold Group. Throughout that time, Craig approached financial planning as “a critical tool to manage financial priorities and achieve a client’s dreams,” a philosophy perfectly aligned with the Alterra approach.

Craig took an early interest in all things financial — purchasing his first security while still in elementary school. Given his history, it’s not surprising multi-generation investing and legacy planning are his special interest. Listening to the stories of his clients and then helping them along the path to their goals brings Craig personal joy. So, it will likely come as no surprise that Craig was also a college tennis coach for over 20 years. To repeat Craig’s catchphrase, “coaching, counseling, and mentoring are assets” that he will invest in Alterra Advisors.

The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.

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